TORONTO (Reuters) - Torstar Corp (TSb.TO), the publisher of Canada's largest circulation daily newspaper, reported slipping revenue on Wednesday, as the company sought to offset a grim print advertising market with cost-cutting measures.
Torstar last week said it would sell its Harlequin romance novel publishing business to News Corp for C$455 million ($418 million) in cash. This helped assure investors who were worried its dividend payout was unsustainable, but leaves the company even more reliant on a turnaround in its newspaper business.
The company said net income attributable to shareholders was C$7.1 million ($6.52 million), or 9 Canadian cents a share, in the three months to the end of March, compared to C$4.2 million,
or 5 cents a share, a year earlier.
Operating revenue from Torstar's media business, which publishes the Toronto Star and a string of regional newspapers, fell to C$211.3 million from C$229.8 million, while total sales slipped 7 percent to C$292.4 million.
Torstar has struggled to offset a broad decline in print advertising in recent quarters, as brands move more of their ad spending online as readers migrate there. Torstar is aiming to make up for losses in its traditional print business by charging users for access to the online version of the Toronto Star.
The company said visibility on how advertising revenues evolve over the course of the year remains limited. It expects to save C$17.1 million in the remainder of 2014 based on restructuring moves completed by the end of the first quarter.
On an adjusted basis, which excluded restructuring and other costs, Torstar earned 14 Canadian cents a share, in line with the average of analyst estimates. The revenue figure missed the average analyst expectation of C$299.2 million, according to Thomson Reuters I/B/E/S.
Torstar's shares closed at C$7.70 on Tuesday on the Toronto Stock Exchange, having jumped to levels last seen in early 2013 after announcing the Harlequin sale.
Reporting by Alastair Sharp in Toronto and Sayantani Ghosh in Bangalore; Editing by Savio D'Souza and Chizu Nomiyama